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2018 Roundup Of Internet Of Things Forecasts And Market Estimates

IoT is the cornerstone of many organizations’ digital transformations, enabling them to optimize existing operations and excel at creating and pursuing exciting new business models.Getty

Worldwide technology spending on the Internet of Things to reach $1.2T in 2022, attaining a CAGR of 13.6% over the 2017-2022 forecast period according to IDC.

IoT Analytics predicts the global market for Internet of Things is expected to grow 37% from 2017 to $151B in 2018.

Ericcson is forecasting the number of cellular IoT connections is expected to reach 3.5B in 2023, increasing at a CAGR of 30%.

The combination of AI, machine learning and contextually rich, real-time data streams delivered by IoT sensors and networks is going to make IoT business cases compelling in 2019. IoT is the cornerstone of many organizations’ digital transformations, enabling them to optimize existing operations and excel at creating and pursuing exciting new business models.

In 2019 new Industrial Internet of Things (IIoT) platforms will be introduced that look to solve the most complex challenges manufacturers have of consolidating all production systems into a single data model. Manufacturers adopting IIoT and orchestrating analytics, BI, quality management, mobile technologies and the many benefits of real-time monitoring using IoT sensors will grow faster than the market, out-innovating their competitors in the process.

Key takeaways from the collection of IoT forecasts and market estimates include the following:

Ericcson is forecasting the number of cellular IoT connections is expected to reach 3.5B in 2023, increasing at a CAGR of 30%. The forecast for cellular IoT connections has almost doubled, due to ongoing large-scale deployments in China. Of the 3.5B cellular IoT connections forecast for 2023, North East Asia is anticipated to account for 2.2B. Source: Ericsson Mobility Report, June 2018 (PDF, 36 pp., no opt-in).

Source: Ericsson Mobility Report, June 2018 (PDF, 36 pp., no opt-in).

IoT devices and services will reach an inflection point of 18% to 20% adoption in 2019. DBS Asian Insights is predicting that the IoT installed base will grow from 6.3M units in 2016 to 1.25B in 2030. Source: DBS Asian Insights, Internet of Things The Pillar of Artificial Intelligence, June 28, 2018 (PDF, 64 pp., no opt-in)

Worldwide technology spending on the Internet of Things to reach $1.2T in 2022, attaining a CAGR of 13.6% over the 2017-2022 forecast period. IDC predicts that the consumer sector will lead IoT spending growth with a worldwide CAGR of 19%, followed closely by the insurance and healthcare provider industries. From a total spending perspective, discrete manufacturing and transportation will each exceed $150B in spending in 2022, making these the two largest industries for IoT spending. Source: IDC Forecasts Worldwide Technology Spending on the Internet of Things to Reach $1.2 Trillion in 2022.

Bain predicts the combined markets of the Internet of Things will grow to about $520B in 2021, more than double the $235B spent in 2017. Based on their latest survey of IoT early adopters, Bain is seeing more of their enterprise clients trying out new use cases: 60% in 2018 compared with fewer than 40% in 2016. Their findings are consistent with many other surveys and early adopter plans that are predicated on analytics, machine learning and AI providing insights that enable successful digital transformation strategies. Source: Bain & Company, Unlocking Opportunities in the Internet of Things, August 9, 2018.

IoT will drive the greatest business transformation in the next three years according to a recent KPMG survey of 750 tech leaders. The survey also predicts IoT will lead to the next indispensable consumer technology and has the greatest potential to drive the greatest benefits to life, society and the environment. Source: KPMG, The Changing Landscape of Disruptive Technologies, 2018. (PDF, 28 pp., no opt-in).

Integrated end-to-end supply chain planning and connectivity for Industrial Internet of Things (IIoT) projects are the two areas where IoT leaders have the greatest competitive leads today. Digital innovators are also investing heavily in automating Manufacturing Execution Systems (MES) with IIoT technologies. The following graphic compares digital maturity levels by adoption. Source: PwC, Internet of Things Keynote Presentation, September 2018.

Source: PwC, Internet of Things Keynote Presentation, September 2018.

Environmental monitoring, smart metering, inventory intelligence, renewable plants supervision and operator productivity are the five highest potential uses cases according to Capgemini. Their latest analysis of how companies are getting business value from their IoT strategies compare use cases by their benefit of implementation and payback period of investment. Source: Capgemini, Unlocking the business value of IoT in operations, 2018 (PDF, 28 pp., no opt-in).

Source: Capgemini, Unlocking the business value of IoT in operations, 2018 (PDF, 28 pp., no opt-in).

McKinsey found that the majority of companies who are successful in launching IoT-enabled products consider the inclusion of new connectivity options a line extension, not an entirely new product. Capitalizing the familiar, most successful companies launching and selling IoT products rely on their existing proven platforms as a foundation for growth. Source: McKinsey Quarterly, What it takes to get an edge in the Internet of Things, September 2018.

Source: McKinsey Quarterly, What it takes to get an edge in the Internet of Things, September 2018.

IoT market growth will be driven primarily by Manufacturing and Automotive industries’ reliance on connected unit product strategies, with Transportation & Logistics forming the largest share of industry-specific IoT revenue. Manufacturing unit sales are expected to grow over 2X between 2014 and 2018. The automotive industry’s adoption of IoT will grow 37X from 2014 to 2020. Regarding revenue, the automotive industry is expected to reach $303B by 2020. Source: Deloitte, Harnessing the power of Internet of Things to transform Industry in India, 2018 (PDF, 17 pp., no opt-in).

Source: Deloitte, Harnessing the power of Internet of Things to transform Industry in India, 2018 (PDF, 17 pp., no opt-in).

IHS Markit predicts the installed base of IoT devices will rise from 27B in 2017 to 73B in 2025, fostering entirely new edge-based use cases. The proliferation of IoT devices, sensors and systems are the catalyst of edge-based applications that capitalize on the technologies’ ability to scale geographically. HIS Markit believes edge-based use cases for IoT will be a powerful catalyst for growth across the key vertical markets shown in the graphic below, along with their market estimates. Source: IHS Markit, The top transformative technologies to watch this year, 2018 (PDF, 16 pp., no opt-in).

Business investment will grow from $215B to $832B versus consumer-driven spending at $72B in 2015 to $236B in 2020. Combined, businesses, governments, and consumers will invest nearly $1.6 trillion to install IoT solutions in 2020. Software and application development are predicted to make up the majority of the investment. Source: PwC, The Industrial Internet of Things, (20 pp., PDF, no opt-in)

I am currently serving as Principal, IQMS. Previous positions include product management at Ingram Cloud, product marketing at iBASEt, Plex Systems, senior analyst at AMR…Read More

I am currently serving as Principal, IQMS. Previous positions include product management at Ingram Cloud, product marketing at iBASEt, Plex Systems, senior analyst at AMR Research (now Gartner), marketing and business development at Cincom Systems, Ingram Micro, a SaaS start-up and at hardware companies. I am also a member of the Enterprise Irregulars. My background includes marketing, product management, sales and industry analyst roles in the enterprise software and IT industries. My academic background includes an MBA from Pepperdine University and completion of the Strategic Marketing Management and Digital Marketing Programs at the Stanford University Graduate School of Business. I teach MBA courses in international business, global competitive strategies, international market research, and capstone courses in strategic planning and market research. I've taught at California State University, Fullerton: University of California, Irvine; Marymount University, and Webster University. You can reach me on Twitter at @LouisColumbus.Read Less